Published March 2006
Builders enjoying Snohomish County’s strong construction activity this year may run into some material shortages because the entire Pacific Northwest is a hot market for residential, commercial, industrial and public works projects.
A panel of major project owners recently told the Seattle-based Northwest Construction Consumer Council that some materials could see price hikes, too, as local, regional and global supply-and-demand forces put pressure on various commodities, including drywall and cement.
Laborers, too, are expected to be in short supply in many fields as skilled workers see their ranks stretched to handle a pipeline filled with both major and minor projects, they said.
For instance, Don Grimes, vice president of Glacier Northwest, the region’s largest supplier of cement products, said he’s “having trouble finding enough drivers, and they’re limited by the feds in their work hours, which can be a huge problem for us.”
Also, he said he sees “increasing cost for cement, aggregate and equipment in the concrete market, with much of the cement being imported into Washington from other states.”
Kim Robinson, regional engineer for the American Institute of Steel Construction Inc., a nonprofit organization, said construction steel is primarily made from scrap metal, noting that the problem is not supply but price.
“At the rate U.S. teenagers are wrecking cars, we can’t run out of scrap,” she quipped, “but China is paying more for scrap metal and steel, so we have to pay more. Price is the only issue.”
The situation is made worse, she said, by the fact that in the past year China has “gone from a net importer of steel to a net exporter of steel, primarily to developing countries such as South Africa, making them a new competitor in the world marketplace.”
As for metal framing products, prices are expected to be stable this year, predicted Joe Brosseau, purchasing manager for Vertecs Corp. in Seattle, with good supplies available through the summer.
Drywall, on the other hand, has been on allocation for the past year, he said. Although most Puget Sound suppliers will get all they want, he said, quarterly price increases are expected.
With five insulation producing plants down for maintenance nationally, suppliers already are limiting allocations to clients, he said, and surcharges to cover rising fuel costs for delivery trucks are still being seen in nearly all industries.
Tracy Robbins, area manager in the Seattle area for Walters & Wolf Inc., Mukilteo, suppliers of glass, glazing and exteriors of high-rise office buildings, told the group glass manufacturers continue to face high prices for the large amounts of electricity used in making products.
“Energy cost is a big item for us. The price of aluminum extrusions was up 10 percent in January over the prior year, but the price of glass is of more concern to us. With two major commercial fabricators in North America closed, the remaining plant has a 32-week waiting period. With new plants coming, prices should come down in six to 12 months. We’ve also seen gasoline prices increasing dramatically.”
Like the region, Snohomish County is expected to feel the impact of the robust economy in the region and nationally, said U.S. Bank regional economist John Mitchell, making his 10th annual Pacific Northwest economic outlook presentation to the NWCCC.
He foresees ongoing residential growth, increasing construction of health-care facilities for the aging population, higher state education budgets for more schools, rising hotel occupancy as tourism grows and strong port activity spurred by increased global trade.
Mitchell also noted strong aerospace industry production and employment is supporting an outlook for long-term employment growth at a faster rate than the national economy. Office vacancy rates in the Puget Sound region are declining, he said, and many commercial projects held back during the slower economy are under way again.
Summarizing major construction in the state, managers for BP and Shell refineries, the Washington state Department of Transportation and Sound Transit, the ports of Seattle and Tacoma, the University of Washington, the state General Administration office, Amgen, Vulcan and Boeing reported on their current and future projects:
© 2006 The Daily Herald Co., Everett, WA